I agree the debt is going to be a problem (though not an insurmountable problem - Japan is a wealthy country), but I don't understand why you think the size of the companies is an issue.
Because if one of those companies struggles or goes under then you have a serious problem on your hands. It's also indicative of the lack of a thriving startup culture.
What serious problem is that? In a shrinking labor market maybe you don't need the jobs. If Japan's shrinking population is such a terrible thing, why is Japan's per-capita GDP rising and why is Japan's unemployment rate 3.1%?
If a single big company fails then you have an instant drop in tax receipts and a rise in benefits. The communities in which the business is located instantly suffers which then flows through to supporting businesses also going under. All of which puts immediate pressure on the job market as you have lots of skilled people looking for work.
And nobody is saying that problems associated Japan's shrinking population of working adults are going to manifest immediately. It's a long term macroeconomic trend which when you combine with an ageing population means significant structural risks. Every Western country e.g. UK, US, Australia, Europe all have quite sizeable immigration rates purely to cater for these risks.
Yes. Because you're making the assumption that fewer jobs is a bad thing even though the number of people who actually need jobs is going down.
Is that such a difficult concept to grasp?
>If a single big company fails then you have an instant drop in tax receipts and a rise in benefits.
Not true. Again, Japan has a 3.1% unemployment rate. It's a lot easier to find a job in Japan than it is to find a job in the US, where we've seen between a million and two million immigrants a year for decades.
In terms of tax receipts, again, tax receipts go down but you have less to spend money on. Fewer schools, less road work, fewer prisons. Particularly in a culture where the family takes care of aging relatives, I don't see this as a big budgetary calamity.
>And nobody is saying that problems associated Japan's shrinking population of working adults are going to manifest immediately.
Why not? Why wouldn't we see at least some trending along these lines?
>Every Western country e.g. UK, US, Australia, Europe all have quite sizeable immigration rates purely to cater for these risks.
The risks they're trying to mitigate aren't the ones you think they're trying to mitigate. If you're running a large corporation a shrinking population scares you because it means rising labor costs and a smaller market for your goods. So you use your influence to make sure the government allows a lot of immigration.
Since I'm not running a multinational corporation the national GDP doesn't matter that much to me. What matters is how much I get paid, how high my taxes are, and how much things cost. I'd rather have fewer neighbors who share my culture than a higher GDP.
Imo the bigger issue isn't the bigco itself going down: it's the hundreds of suppliers (and there are many levels of suppliers supplying to higher tier suppliers) that may also go down in a domino effect.
Well sure, that makes it worse, but it isn't really a separate thing. What's even worse than the big firm and its suppliers failing, is all of those firms not failing.
When enterprise is not so centralized, little firms fail all the time, and are quickly replaced by other little firms. OTOH in the Japan/Korea situation (and with TPP etc., probably USA in the near future), ineffective organizations hide within bigco's indefinitely, consuming resources in inefficient, anticonsumer fashion.
The Japanese are rather entrenched in their way of life, and they don't want foreigners coming in and changing their society. It's not hard to sell immigrants on Japan. It's hard to sell Japan on immigrants.
Japan is one of the worst countries for immigrating to.
If you don't look Japanese you aren't Japanese no matter how good your language, cultural or social skills are. And if you aren't Japanese then you will be treated as a seperate class and often discriminated against e.g. housing.
The institutional xenophobia/racism in Japan is simply unlike what most countries have.
This feels like the beginning of global population flat lining in the coming years. We eventually want the population of the world to level out and decline for environmental reasons. Are there ways to combat the adverse economic effects of a declining population besides trying to raise the birth rate?
I think that if you ignore classic post war economic orthodoxy[1] there are offsetting economic benefits to a declining population. Such as every year you don't need as much infrastructure. The number of children that need to be educated goes down. The ratio of the countries carrying capacity vs actual population improves pushing you farther away from the Malthusian limit.
Maybe not so good if you're in the drywall business.
[1] The kind that focuses on aggregate money flows and spending to the exclusion of everything actually important.
> So then you do what many cities around the world have done, and tear out highways to lower opex and create a more pleasant place to live.
Yes, you can do that: that's a capital cost of maintaining quality of life under declining population. I'm not sure how a choice between continued declining quality of life or incurring a significant capital cost is a "benefit", however.
> I think that if you ignore classic post war economic orthodoxy there are offsetting economic benefits to a declining population.
There might be some benefits, but I've yet to see an argument that they are such that the balance is negative for the specific case of Japan.
> Such as every year you don't need as much infrastructure.
Which would be fine, if X infrastructure with Y proportion degradation due to lack of maintenance was equivalent to X*(1-Y) of optimally-structured infrastructure.
Nice equation, makes your argument look more sciency.
Problem with it is that it ignores that physical things don't follow standard accounting depreciation schedules. Like I mentioned, you can't make the assumption that physical resources like energy, labor, and materials flow through the economy like intangible 'money'
The problem with your equation is that real things don't degrade by X percent per year. Or more that the utility tends not to. For maintenance you usually have a fix part that is based on time and a variable part that depends on use. And typically the the cost of depreciation occurs mostly at the end of life when you need to expend real resources to replace it. However if you don't need to replace it then what? Bonus.
Now I have less files, so I can save money by not upgrading.
Sure, you might not be forced to upgrade due to space constraints.
But harddisks are mechanical devices - they degrade over time (just like trains, roads, plumbing etc.). If you don't replace your harddisks for 10 years, because you somehow manage to delete a bunch of files, and not replace them ....well, good luck trying to access your data.
Also, technology is constantly evolving - and trite as it may sound, if you're not going forwards, you're going backwards.
Have you tried using, oh, say, a Quantum fireball drive lately, to run a modern operating system or modern applications?
I mean, apart from the incompatibility issues, even if you got it running, and even if you managed to fit it on there, it just wouldn't be able to keep up.
So no, having a falling population doesn't mean you can just sit and let your infrastructure run into the ground.
I'm not sure if those benefits are enough to offset the deflationary effect of rapidly declining population.
However, at some point, all the reasons for not having children will be overcome by survival instinct kicking in. Japan has already reached the inflection point with birthrate going up again.
History is going to look back very favourably on Merkel.
The Syrian refugees are mostly educated, middle class and not only was it a good thing to do from a humanitarian perspective. It's a very shrewd move from an economic one as well.
The US? Australia? Canada? New Zealand? The line between "skilled migrants" and "colonists" is blurred in the earlier part of their histories, but all those countries seem to be doing well in the grand scheme of things.
> The line between "skilled migrants" and "colonists" is a blurred in the earlier part of their histories, but all those countries seem to be doing well in the grand scheme of things.
I think the native peoples of those countries would take issue with the idea that "skilled migrants"/"colonists" were a good thing for their nations.
It seems bizarre to say we're optimizing for the economic success of the landmass and not the people currently living in it.
It is unlikely we will be slaughtered or deported from our nations if we allow immigration and see a gradual demographic shift towards the immigrants like in colonial times.
News organizations do NOT like these impenetrable homogenous conservative cultures. To them, there must be something wrong. The answers are that Japan will correct itself just fine. They are, equal to if not THE most persistent, hardest working, most innovative society alive. They'll figure it out.
Japan's population has the 4th highest IQ of any country in the world (105). The homogeneity also lends to a very high trust factor, so if any country can turn itself around, I think it's them.
That's what I thought after the 1989 crash. But look at the Nikkei stock index.[1] It peaked above 37000 in 1989, and bottomed out around 7000 in 2010. Today, it's around 20000.
I was expecting Japan to figure out how to become a successful post-industrial society. But no. Government attempts to fix the economy have mostly involved heavy spending on infrastructure, which beats the US approach of pumping money into the banking system. At least the infrastructure is in good shape. But Japan hasn't returned to being the industrial powerhouse it once was.
Japan is an old nation, and this is hardly the first challenge it has faced. The fact that it exists now, indicates it "corrected" several times in the past. I'd be more suspicious of younger nations' ability to react to challenges.
Japan as a unified nation in the modern sense is newer than the United States of America. Prior to the Meiji Restoration in the 1860s Japan was a feudal society lead by warlords. The rule under the Tokugawa shogunate was relatively stable, but it was still a feudal society.
I don't think anyone is claiming Japan will cease to exist as a country and that the Japanese people would die out, but something with as radical a change as the Restoration (Which included multiple civil wars...) would probably not count as the nation just correcting itself. It is the effective death of one form of the nation and the birth of the other.
Haha I guess it isn't a surprise when some Americans make true-Scotsman claims like this. They shouldn't be jealous of other nations' extensive histories, rather they should enjoy those histories.
When the shogunate emerged in Japan to govern in place of the abdicating, distracted Heian imperial court, USA was populated by various neolithic tribes. Akihito is a direct descendant of the emperors who ruled then, and speaks the same language in his court that they did. I haven't heard much pre-Columbian Algonquin spoken in the White House.
Civil wars don't switch to a different "civilization". (The one in USA didn't, did it?) Japan's remarkable post-WWII recovery from the devastation of war and poor governance in the 1940s to economic success in the 1960s-80s (which IMHO is more impressive than the Meiji restoration to which you refer) is compared by Japanese themselves to earlier recoveries such as that during the early Edo period. The culture, language, and society that exists in Japan today descends directly from those that accomplished previous impressive transitions.
Is there a fallacy related to crying fallacious argument when there isn't one? If so, I suppose I should pull that card right now...
It's hardly jealousy. And you're arguing against claims I didn't make - I never said a civil war changes civilization in and of itself. But we're talking about a period where the way the country had been ruled for hundred of years completely changed, with huge amounts of turmoil, lots of bloodshed, and came out on the other site vastly changed. To try to compare it to the US Civil War, where in comparison things were static (As far as the governance of any nation remains static) when it comes government reform, is silly. The US punished the South, but the federal government behaved much as it had before.
In comparison, the Meiji restoration ended centuries of feudal society.
I always find it hilarious when people visit Japan, look at the shrines and think that it belongs to a really old era. When in fact it was during the Meiji period (after Australia was founded) that these were erected.
Not before they struggled and struggled until death. And that struggle sometimes turn into innovation. After all, necessity is the mother of invention.
Young people already in the West might like to have kids as well, if not for the massive looming burdens already upon them in part because of these subsidized social costs, not to mention growing college education debts and home ownership further out of reach. Intelligent people see the looming clouds of everything from a growing national debt to the difficulty of integrating foreigners and recognize that these have costs to be inevitably paid in the form of taxes or bonds/inflation. Unfortunately it's the stupid people who don't see it or don't give a shit and have kids they won't be able to take care of, only increasing the burden on the rest of us. I'd like to be able to put away an additional 20% into savings for my own children, not someone else's.
Ah yes. It's the stupid people that have caused massive housing costs increases, massive healthcare increases and stagnant wages. Yup despite your taxes not increasing a cent since that islamofascist Kenyan took over the office of POTUS it is you that has to bear the burden of stupid people having kids.
Low IQ immigrants have not caused most of these issues, they simply compound them and add to the overwhelming burden that already exists. It takes a special kind of stupid to not realize that these increased costs eventually have to be paid in one form or another.
For a country with a ton of Government debt and a society dominated by small number of big companies that's a bad thing.